February 28, 2019

German hardware company among February’s recipients of angel investment

January 2019 was a relatively quiet month in terms of the volume and value of announced angel investment deals targeting Western European companies as 35 such deals worth a combined EUR 170 million were signed off during the month. This result represents a 17 per cent decline in volume on December 2018’s 42 deals, while value slipped 12 per cent from EUR 193 million over the same timeframe.

At the time of writing, there is still around a week to go until the end of February and so far, there have been 11 announced Western European angel investments worth an aggregate EUR 131 million. A number of sizeable deals have ensured value is quite respectable in spite of the month’s low volume. February’s largest deal to date is worth EUR 68 million and took the form of a Series C funding round by UK-headquartered online digital banking services provider Starling Bank, led by Merian Global Investors (UK) and with participation from Harald McPike, who previously provided the company with seed investment and has contributed GBP 10 million to the latest injection. Interestingly, this is McPike’s second investment in the company this month; he also contributed EUR 17 million in a separate transaction. The EUR 68 million deal alone accounts for 40 per cent of total Western European angel investment value in February to date and is followed by a EUR 30 million Series C round by French mobile application developer Lunchr. That round came from Index Ventures, Idinvest Partners, Daphni and Kima Ventures.

As usual, software/technology companies were frequently targeted by angels in February. In fact, there was only one exception, which saw a hardware manufacturer pique the interest of investors, in an unusual turn of events. That transaction featured a Swiss target as UrbanAlps secured a EUR 2 million Series A round of funding from Swiss professional footballer Stephan Lichtsteiner and seven other unidentified investors from Switzerland, Germany, Finland and Norway. The company is headquartered in Zurich and manufactures StealthKey, which it describes as the world’s first 3D printed metal key. The product is designed to make unauthorised duplication of security keys extremely difficult by hiding mechanical codes internally to prevent anyone scanning or photographing the code. It is also fortified with anti-drill segments and has a modular design, meaning it can easily be extended based on a central connecting bar. Proceeds of the funding round will be used to enable the company, which employs ten people, to begin mass production of its products. In addition to its headquarters, the firm has offices in Prague and Dubai.

Hardware manufacturers are rarely the subject of interest from angel investors; in fact, Zephyr shows that only 12 such deals have been announced on record, with the UrbanAlps injection being the sixth-largest of these. The most valuable was worth EUR 60 million and occurred in August of last year, when US latch-access mobile application provider Latchable completed a Series B funding round led by Brookfield Capital Partners and including participation from angel investor Tishman Speyer, among others. That transaction was considerably larger than the second-placed deal – a EUR 6 million series A round by smart lock manufacturer August Home, which closed in November 2013 and was led by Maveron, with participation from multiple private equity firms, as well as angels Matt Mullenweg, Mark Pincus, David Dolby and Scott Belsky.

In all, 2019 is off to a quiet start, but the fact that a number of sizeable investments were announced in February proves there is an appetite for dealmaking and gives hope that activity levels will increase as we move through the year.

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